Do you think of investing in real estate? Worry no more, Kick start your journey with Ponte Vedra Real Estate and become one of the successful real estate investors in the world.
The benefits of investing in real estate are so intense. They range from excellent returns, predictable cash flow, value appreciation, and tax advantages. The investment can help you accumulate wealth in no time.
Here are some of the reasons why real estate is a superb investment:
Predictable Cash Flow
Cash flow is the net income you remain with from the investment after all the possible deductions such as mortgage payment and operating expenses. You can generate a cash flow of 6% or more in real estate investment.
Value Appreciation
According to the national association of realtors, since 1968, the real estate sector has experienced appreciation levels of 6% per year. The investors have been making money through property-dependent business activities and rental income.
Leverages
One of the benefits of investing in real estate is leveraging. It is the growth of potential investment returns by using the borrowed capital. For example, a 20% mortgage down payment gets you 100$ of your dream house. It is because real estate is a tangible asset and serves as collateral.
Build Equity and Wealth
When you fully pay your property mortgage, the equity builds. The asset now becomes part of your net worth. With the built equity, you have the leverage to buy more properties. In the process, your cash flow increases as you become more wealthy.
Tax Breaks and Deductions
Availability of the tax codes enables various deductions for expenses to be made. They are used to offset income and reduce the overall taxes.
Portfolio Diversification
Diversification potential is one of the benefits of investing in real estate. Adding real estate to a range of varied assets lowers portfolio unpredictability and provides a greater return per unit of risk.
Real Estate is Improvable
Real estate is a tangible asset. It consists of bricks, concrete, glass, and wood. These are products you can improve on anytime to the standards you need to increase the worth of your property.
Real Estate is a Retirement Investment
When you purchase your property, the cash flow and the principal reduction on the mortgage are low. You pay off the mortgage, the cash flow increases. It is a saving plan that leads to a large amount of money as time goes by.
The Gains are Deferrable
According to the 1031 exchange, the tax code allows you to transfer the money you have received after selling an investment property to a new property you are purchasing. The taxing body then defers the payment of tax on the sale of the old property.
Inflation Hedge
Inflation wipes away the wealth of investors in the long run. They strive to protect their wealth against its harsh effects. The good news is that real estate hedges investors against inflation. The reason being, the asset value grows higher than the inflation rate. For example, They adjust house rents to curb the inflation rate.
Competitive Risk-Adjusted Returns
Factors like asset class, location, and management lead to varied returns. Many investors target to have average returns of S$P 500. The average real estate’s annual return over the past 50 years is around 11%.
It is evident that you will not regret investing in real estate. Investors are guaranteed the safety of their money. Furthermore, the benefits accrued from the investment plan are so immense and life-changing. Apart from it being easy to purchase and finance, real estate protects the investors against inflation and its harsh effects.
